How to Set Up Your Payroll in Vagaro

The PayrollFeature allows you to configure and keep track of employee pay, tips, and commission. Additionally, you can pay employees weekly, bi-weekly, monthly, or bi-monthly and run detailed reports, displaying a breakdown of cumulative hourly pay as well as the commission structure for each employee.

To set up your payroll in Vagaro, follow these steps:

Click Reports at the top of the screen.

Select Payroll Configuration under Employees on the left side of the screen.

Once you're finished, click Save or click Save and Run Payroll if you are ready to run your payroll.

Let's get started!

1. Click Reports at the top of the screen.

2. Click Payroll Configuration on the left side of the screen under Employees.

3. Select your Payroll Frequency or how often you pay your employees. For example, you can pay employees Weekly, Bi-Weekly (every two weeks), Monthly, or Bi-Monthly (on the 15th of each month and the last day of the month).

4. If you selected the Bi-Weekly frequency, you'll be able to set your Payroll Closing Day and Payroll Ending Day. For example, if your first payroll ending date is Friday, the 14th, the payroll period will be the 1st-14th. The next payroll period will be the 15th-28th, ending Friday the 28th. Payroll will continue every other Friday.

5. Below the Payroll Frequency option, you can set the Overtime pay. Enter the hours under Overtime begins after to set when overtime hours begin for your employees. Then enter the multiplier below Overtime hourly multiplier. This action multiplies the employee's hourly rate by the number you've entered. Remember the multiplier applies only to daily pay.

6. Now that we have set the Payroll Frequency as well as the Overtime hours, let's set the tipping and cost to business options when calculating the commission for our employees.

Let's first look at the Include Tips option. When enabling it, keep this in mind:

Select Include Tips if you want to include all tips, including, cash, and credit card tips, in the payroll.

Select Include Tips if you allow customers to take cash tips but pay them for credit card tips at payroll. In this case, do not enter cash tips at the checkout screen.

Do not select Include Tips if your employees are taking cash tips on the day that the service is completed.

7. Select Deduct Service/Class Cost if you want to deduct the service cost from the sales price of the service. For example, let's look at a cut and color service. The service is $75, and it costs on average about $5 dollars to complete the service (the cost to business). If you subtract the cost to business, the net for the service is $70. The system will see this and only give service providers commission on the $70 net gain instead of the $75 sales price.

8. Select Deduct Product Cost to deduct the product cost from the sales price. For example, let's say you have a product that costs $2 and the sales price is $20. If you subtract the cost to business, the net for the product will be $18. The system will see this and only give service providers commission on the $18 net gain instead of the $20 sales price.

9. Select Subtract Discounts from Commission to subtract the sales discount from the service price when calculating commission. Here's an example that highlights this feature. Let's say you are a business owner and you're offering a 50 percent discount on haircuts for a weekend. If this option is selected, the employee will receive a commission on the discounted price, which is $15 in this instance. If this option is not selected on a $30 haircut, the service provider will receive the full $30 commission.

Commission Structure Per Employee

Let's now set up the hourly rate as well as the commission structure for each employee. You'll find this towards the bottom of the screen on the Payroll Configuration page. You can specifically set the Hourly Rate ($), Threshold as well as the Commission Threshold Percentages for services and products for employees. You can also set a commission structure for classes.

Threshold and Commission Percentage

To get started, click the Percentage tab to set a commission structure for your service, product, and class sales.

The Commission Threshold tells the system to stop paying one commission and start paying another. Let's take look at the commission structure for Amanda G, the first employee in the example below, and let’s focus on the commission for her service sales.

We've entered 1500 for the Service Threshold ($), 45 for the Service Commission Below Threshold (%) and 50 for the Service Commission Above Threshold (%). In this case, Amanda will receive the 45 percent commission (the below threshold) if she sells less than 1500 dollars in sales, but if she sales more than this amount, she will get the 50 percent commission, the above threshold. You also can set the threshold for Product and Class sales for each employee.

To set a flat commission, enter the same percentages for the below and above threshold. Then enter "0" in the Threshold ($) field. You can do this for services, products, and classes.

Once you're finished setting up your payroll, click Save at the bottom of the screen. If you are ready to run payroll, click Save and Run Payroll.

If you want to set up a commission structure based on the number of attendees in a class, click the Class Flat Rate option.

Class Flat Rate

This option allows you to set a commission structure based on the number of attendees that show up to an appointment or class. Let's explore this feature in more detail.

1. Click the Class Flat Rate tab on the Payroll Configuration screen.

2. Let's now set the commission for an employee. Let's look at Amanda G, who is the first employeein the example below. We've entered 5 in the box under No Show. This means that Amanda will receive a flat rate of 5 dollars if a customer does not show up to an appointment.

Let's look at the next column. We've entered 10 in the box under 1 attendee. This means Amanda will earn 10 dollars in commission if at least one client makes it to the appointment or class.

Let's now look at the third column. We've entered 20 in the box under 5 attendees and 30 in the box under 10 attendees for Amanda. In this case, the employee will receive 20 dollars in commission if 5 to 9 customers participate in the class. But she will receive 30 dollars in commission once the class capacity reaches 10.

She will receive 40 dollars in commission once the attendee list reaches 25 as we have assigned the 40 dollar commission to 25 or more attendees.

Adding an Additional Commission Column

Click the +Add link to add an additional column to set a new commission structure for your employees.

Removing a Commission Column

1. To remove a commission column, place your cursor in the box where you set the Attendee number. Then click the trash icon.

2. Click Remove.

Copying Commission Structures

To make the commission the same for all employees in a commission column, place your cursor in one of the boxes in which you set your commission for an employee. Then click Copy to All. In the example below, we were able to copy the commission of 20 dollars to the other employees.

Giving Commission Based on Customers Marked as Show or Paid

Click Check-In or Paid to give commission to an employee if an attendee has checked in (marked as Show) or has paid for the service or class. Click Paid to give commission to an employee only if an attendee is marked as Paid, meaning they have been checked out and paid for the service or class. If you select Paid and the attendee is marked as "Check-In," but does not pay for the class, the employee will not receive a commission.

Once you're finished setting up your payroll, click Save at the bottom of the screen. If you are ready to run payroll, click Save and Run Payroll.

The Payroll Configuration setup allows for you to input the hourly wages, commission percentages, and if the tip is being included in their paycheck. The payroll report will generate and itemize the pay due based off of the numbers you set against the sales and hours worked for each employee. If you need a greater explanation, please give us a call at 800-919-0157 opt. 2 for support. Your post is something I would typically have you call technical support for.